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Lawsuit: Kushner Company Charges Illegal Fees to Its Tenants

FILE - A man walks out of the 666 Fifth Avenue office tower owned by the Kushner Cos., the real estate company run by the family of Jared Kushner. in New York, March 29, 2017.

The real estate company run by the family of Jared Kushner is being sued by two tenants in Maryland for allegedly adding excessive and illegal fees to their rent.

The lawsuit filed Wednesday in the Circuit Court of Baltimore alleges that businesses owned by the Kushner Cos. have been charging 5 percent late payments, not just for what they claim to be late rent, but also to larger amounts that include “agent fees” and “court fees” in violation of Maryland law. The lawsuit describes the charges as part of a “fee churning scheme” that keeps renters under constant fear of eviction, and guessing as to what they owe.

The lawsuit is seeking class action status.

The Kushner Cos. did not immediately respond to a request for comment.

The suit was filed on behalf of Tenae Smith, a mother of two living in Dutch Village apartments, and Howard Smith, who lives in Carroll Park Apartments in Baltimore County. The complexes are managed by Westminster Management, a subsidiary of Kushner Cos., which is also an owner under various other names.

Jared Kushner stepped down as CEO of Kushner Cos. earlier this year before becoming a senior adviser to his father-in-law, President Donald Trump.

Andrew Freeman, an attorney representing the plaintiffs, said Westminster Management operates roughly 17 complexes in Maryland with thousands of units, though the lawsuit would apply only to those who have been required to pay illegal fees in the past three years. Freeman said he has spoken to several tenants about possibly joining the suit, but couldn't provide a specific number.

“We think it's outrageous that landlords charge improper fees to their tenants, and we think it's doubly outrageous when they then misallocate rent payments to those fees in order to generate more fees,” he said. “We think it's triply outrageous when they then extort the payment of those fees from tenants by threatening to evict them if they don't pay. It's egregious when any landlord does this. And it's particularly egregious when a company affiliated with Mr. Kushner does it.”

Earlier this year, Democratic lawmakers requested thousands of pages of documents pertaining to properties owned by Kushner Cos. in Maryland. U.S. Sens. Ben Cardin and Chris Van Hollen, and U.S. Reps. Elijah Cummings, Dutch Ruppersberger, John Sarbanes and Anthony Brown, sent a letter to Kushner Cos. to remind them that the company must comply with Department of Housing and Urban Development regulations because it receives federal rental subsidies.